Oracle® Fusion Applications Compensation Management Implementation Guide 11g Release 7 (11.1.7) Part Number E20376-07

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21 Define Elements, Balances, and Formulas

This chapter contains the following:

Define Elements, Balances, and Formulas: Overview

Payroll Relationships: Explained

Manage Organization Payment Methods

Manage Payroll Definitions

Manage Fast Formulas

Manage Balance Definitions

Manage Elements

Define Elements, Balances, and Formulas: Overview

The Define Elements, Balances, and Formulas task list contains the tasks required for creating payroll elements for compensation and HR management. You can use this task list if you are recording earnings, deductions, and other payroll data for reporting, compensation and benefits calculations, or transferring data to a third-party payroll provider.

The Define Elements, Balances, and Formulas task list is included in the Workforce Deployment and Compensation Management offerings. These offerings contain other tasks that must be completed first. In particular:

• Ensure that you have defined the payroll statutory units that you require using the Manage Legal Entities task.

• Associate a legislative data group with each payroll statutory unit using the Manage Legal Entity HCM Information task.

Performing these tasks ensures that payroll relationship records are created automatically when you hire employees. Employees must have a payroll relationship so that you can create element entries for them.

The Define Elements, Balances, and Formulas task list includes the following tasks.

Configure Legislations for Human Resources

Use this task to create rules for legislations not initially provided by Oracle. It guides you through configuring some payroll objects and values required for creating elements. These include tax year start date, period of service on rehire rules, default currency, element classifications, and payment types. Complete this task before the other tasks in this task list.

Manage Consolidation Groups

You must have at least one consolidation group for each legislative data group for which you are defining elements. A consolidation group is a required value when you create payroll definitions.

Manage Organization Payment Methods

If you want to record personal payment methods for your employees, you must create organization payment methods and associate them with your payroll definitions. Organization payment methods define the combination of payment type and currency to use for payments to employees or external parties.

Manage Payroll Definitions

Employees must be assigned to a payroll if you want to create element entries for them. The payroll definition determines the payroll period end date, which is the end date of nonrecurring element entries. You create at least one payroll definition for each payroll frequency, such as weekly or semimonthly, within a legislative data group.

Manage Element Classifications

Primary element classifications are predefined. If you run the Calculate Gross Earnings process (provided with Oracle Fusion Global Payroll Interface), you might create subclassifications to feed user-defined balances.

Manage Fast Formulas

You can write formulas for a number of uses, including validating user entries into element input values, and configuring compensation, benefit, and accrual plan rules. If you use the Calculate Gross Earnings process, you can write payroll calculation and element skip rule formulas for earnings elements. The payroll calculation formula calculates the periodic value to be passed to the third-party provider.

Manage Balance Definitions

Most of the balances you require are predefined. You can create additional balances for reporting or system extracts. If you are using Global Payroll Interface, additional balances are created automatically when you create earnings elements. You can edit the definition of these generated balances.

Manage Elements

Use the Manage Elements task to create earnings and deductions. Create each element and then edit it to create or edit input values and at least one element eligibility record. You can also create balance feeds. If you run the Calculate Gross Earnings process, you can add a status processing rule to associate an earnings element with a formula.

Manage Object Groups

You can create object groups to specify subsets of elements or payroll relationships to include in a report or process, such as the Calculate Gross Earnings process.

Payroll Relationships: Explained

A payroll relationship exists between a person and a payroll statutory unit, which is the legal entity responsible for employee payment. Payroll relationships group person records based on payroll regulatory and statutory calculation and reporting requirements. This grouping enables the aggregation of balances across multiple employment terms and assignment records.

Important aspects of payroll relationships include:

• Creation of payroll relationship records

• Payroll employment model

• Payroll calculation at the payroll relationship level

Creation of Payroll Relationship Records

When an HR administrator processes a new hire, the application automatically creates a payroll relationship record for that person. As an administrator adds employment terms or assignments for that person, the application uses several factors, such as system person type, payroll statutory unit, and country-specific relationship mapping rules, to determine whether to create a new payroll relationship record. Predefined mapping rules for payroll relationships also define the payroll relationship types that indicate whether payroll processing can occur. These predefined rules can vary by localization. For example, in the US, the Employee person type maps to the payroll relationship type that is defined to be processed in payroll runs, whereas the Contingent Worker person type maps to a payroll relationship type that is not be processed in payroll runs.

Payroll Employment Model

The structure of the payroll employment model provides the capability to have employment terms and assignments that can be linked together for calculations based on the payroll statutory unit. Therefore, information must be stored at the various levels of the payroll employment model. This information is used by the various payroll processes.

Your enterprise might be defined to use two-tier and three-tier employment models. The three payroll employment levels are:

• Payroll relationship

  The payroll relationship is the highest level for which to accumulate balances. Elements assigned at the payroll relationship level are processed in every payroll run. Payroll relationship elements are typically deduction elements, such as tax, pension, social insurance, or court orders.

  Payroll relationships are also used outside of Oracle Fusion Global Payroll to facilitate the extraction of data from HCM that is sent to a third-party payroll provider for payroll processing. For example, payroll coordinators use Oracle Fusion Global Payroll Interface to extract benefits data from HCM and send that data through payroll relationships, along with payroll-related data.

• Employment terms (three-tier model only)

  Employment terms are commonly used as a middle layer in the payroll employment model to help manage multiple assignments and to satisfy tax and reporting requirements at a lower level than the payroll statutory unit. Elements assigned at the employment terms level are typically salary, pension, or social insurance elements that vary based upon the employment terms.

  Note

  Employees with multiple terms or assignments that are paid on payrolls using different frequencies, such as Monthly and Semimonthly, must have different employment terms or assignments for each payroll. In a two-tier configuration, payrolls can be assigned to the assignment record; in a three-tier configuration, payrolls can be assigned to the terms record.

• Assignment

  Because the assignment is the lowest level of the payroll employment model, elements assigned at this usually level vary from one assignment to another or are specifically for a single assignment. Elements at the Assignment level are typically used for monetary terms and conditions, such as overtime rules, rates, union dues or bonuses.

The following figure illustrates the comparison between the HR employment model and the payroll employment model in a US example with two legal employers belonging to one payroll statutory unit. In this example, David Ellis has two different employment terms and assignments, and therefore has two work relationships in the HR employment model and one payroll relationship in the payroll employment model.

Payroll Calculation

Payroll relationships represent the association between a person and the payroll statutory unit. Payroll processing always occurs at the payroll relationship level. This means that to access the results of any payroll process, such as calculation or payment distribution, you start by selecting a payroll relationship record.

Manage Organization Payment Methods

Bank, Branch, and Account Components: How They Work Together

Banks, branches, and accounts fit together on the premise of the Bank Account model. The Bank Account model enables you to define and keep track of all bank accounts in one place and explicitly grant account access to multiple business units, functions, and users. This eliminates the redundant duplicate bank account setup under different business units when these business units share the same bank account.

Banks

Creating a bank is the first step in the bank account creation. The user can search for existing banks, view and update them, or create new banks. You can create a new bank from an existing party. The option to create from an existing party is implicitly implemented by the matching option. The option is available only after the existing party has been found with the same bank. If you choose the matching option, the page repopulates the information from the matched party.

Branches

Once you have created your bank, the next step is create a branch or branches associated to the bank. The matching option is also available when creating branches. To create a new branch without using the matching option, manually enter in the information required. You can define other branch-related attributes in the page. If you do not use the matching option when an existing party is found, a branch with the same party name is created.

Accounts

Once the bank and branch are created, you can proceed to the bank account setup. Select the bank branch you want to associate to your bank account. Assign the owner of the bank account. There are four areas associated to defining the account: general information, control of the account, security access to the account, and business unit assignment. If this is a Payable or Receivable account, the accounts are identified by business unit, and if a Payroll account, by legal entity.

Creating Accounts: Points to Consider

Banks, branches and accounts fit together on the premise of the Bank Account model. The Bank Account model allows you to define and keep track of all bank accounts in one place and explicitly grant account access to multiple business units, functions, and users. Consider the following when you set up bank accounts:

• Assigning a unique general ledger cash account to each account and use it to record all cash transactions for the account. This will facilitate book to bank reconciliation

• Granting bank account security; bank account security consists of bank account use security, bank account access security, and user and role security.

Account Use

Account use refers to accounts created for Oracle Fusion Payables, Oracle Fusion Receivables and Oracle Fusion Payroll. When creating an account to be used in one or more of these applications you must select the appropriate use or uses.

Account Access

Payables and Receivables account access is secured by business unit. In addition to selecting the appropriate application use or uses, one or more business units must be granted access before the bank account can be used by Payables and Receivables. Only business units who use the same ledger as the bank accounts owning legal entity can be assigned access

User and Role Security

You have the option to further secure the bank account so that it can only be used by certain users and roles. The default value for secure bank account by users and roles is No. In Payables and Receivables even if the secure bank account by users and roles is no, you must have the proper Multi-Organization Access Control (also known as MOAC) to access a bank account. If the secure bank account by users and roles is set to Yes, you must be named or you must carry a role that is named expressly on the bank account in order to use it.

Organization Payment Methods: Explained

Organization payment methods identify the payment type and the currency to use for payroll payments to workers and for disbursing employee deductions to third parties.

You must define at least one organization payment method for each type of payment and currency that you use to disburse wages and other compensation to your employees. You can also define rules for validating or processing the distribution of payments when you offer more than one option.

A typical configuration is to have one organization payment method for each combination of legislative data group, payment type, and currency.

Payment Types

Any payment method that you define must belong to one of the payment types that your enterprise supports.

Each payroll must have at least one valid organization payment method for each payment type available to employees on that payroll. There may be more than one payment method with the same payment type.

The most common payment types are:

• Electronic funds transfer (EFT)

• Check

• Cash

Your enterprise may support a different range of types that are appropriate for your localization. For example, some localizations do not allow cash, some do not support checks, and very few support postal money orders.

The names of payment types can vary by localization. For example, in the US, the payment type for EFT is NACHA; in the UK it is BACS, and in Australia it is BECS.

Payment Sources

Payment sources associate bank accounts and other sources of funds with organization payment methods. If you are using Oracle Fusion Global Payroll for payroll processing, each organization payment method that is in use must have at least one valid payment source.

For check and EFT payment methods processed by Global Payroll, the payment source must be associated with an active bank account defined in Oracle Fusion Cash Management. If an organization payment method is associated with multiple payment sources, then the payment method rules determine which payment source is to be used for each disbursement.

You can use the same bank account as a payment source in more than one organization payment method. For example, one checking account may be used to pay both check and EFT payments. The application will not prevent specifying the same name for different payment sources, but it is best practice to use different naming for each occurrence.

When you have one organization payment method for each combination of legislative data group and payment type, you can use payment rules to determine the appropriate payment source based on tax reporting unit. However, there are several reasons why a company might need multiple organization payment methods and multiple payment sources, such as these examples:

• Company X has only one tax reporting unit, but prefers to pay its executive staff from a separate bank account for security and confidentiality.

• Company Y must comply with state laws and union agreements requiring that checks are drawn on an in-state bank. It uses different organization payment methods for each bank used to pay people based upon their locale.

• Company Z may use different currencies to pay foreign nationals and expatriates working in a different country than their home.

Payment Rules

The first payment source defined is the default payment source. If you add more payment sources, you can add subsidiary information as payment rules. For example, if you have multiple tax reporting units, you can specify which payment source to use for each tax reporting unit.

Having a default payment source ensures that employees are paid if there is a change in tax reporting unit. For example, Company A has multiple independent franchises, each with its own tax reporting unit. If a franchise sells, it will have a new tax reporting unit number, and the payment rule will fail. Instead of issuing errors, payment is made using the default payment source.

You might rather not specify a default payment source when payments cannot be made from the specified payment source in the payment rule. For example, Company B has 30 bank accounts and is very careful not to comingle funds. They leave the default unspecified to instead receive notifications that they can resolve manually.

Default Payment Methods

You can define as many payment methods as required for your enterprise. When you create a payroll, you can select which of these methods are valid for employees assigned to that payroll. You select one method as the default method for the payroll. The default payment method is used to determine how to disburse a payment when an employee does not have any personal payment methods specified.

Relationship to Other Objects

You select organization payment methods when defining other objects, such as payroll definitions and other payment methods. Organization payment methods are only available for selection if they are effective as of the date the object is being defined or updated.

For example, if you create a payroll definition effective as of 4/1/2012 and want to associate a particular organization payment method as the default, the organization payment method must have an effective start date on or before 4/1/2012. Similarly, when updating or correcting objects to change the organization payment method, the organization must have an effective start date on or before the effective date of the change.

The functional relationship of organization payment methods with other objects is described in this table.

Setting Up Payment Sources in Organization Payment Methods: Worked Example

This example demonstrates how to set up payment sources when defining organization payment methods to be used in Oracle Fusion Global Payroll for payroll processing.

The following table summarizes the key decisions for this scenario.

In this example, the InFusion US company pays its employees by check and EFT payments. Two bank accounts have been set up for funds used to pay the executive staff and the regular employees separately. The company occasionally distributes payments to external third-party consultants, but must comply with state regulations and pays them from two different banks based on their tax reporting unit.

Prerequisites

This worked example assumes that the following prerequisites of organization payment methods have already been set up:

1. The primary ledger is set up in Oracle Fusion General Ledger and is available for use.
2. The banks, branches, and account information to use as the payment sources are set up in Oracle Fusion Cash Management and are available for use.
3. The legal entity associated with the legislative data group has been assigned to a general ledger.
4. Tax reporting units have been set up and are available for use.

Setting Up Organization Payment Methods

Perform the following steps three times, once for each of the three organization payment methods.

1. In the Payment Distribution work area, click Manage Organization Payment Methods.
2. In the Search Results section, click Create.
3. Select the legislative data group, for example, InFusion US LDG.
4. Select the date when you want this payment to start being available for use, and then click Continue.
5. In the Basic Details section, complete the fields as shown in this table, and then click Save.

   Field	Non-Executive Value	Executive Value	Consultant Value
   Name	Employee Payroll Check	Executive Payroll Direct Deposit	In-State Consultant Check
   Payment Type	Check	NACHA	Check
   Currency	US Dollar	US Dollar	US Dollar

   
   
6. For the non-executive and executive employee organization payment methods, in the Payment Sources section under Employee Payment Sources, click Create.

   On the Create Payment Source page, complete the fields as shown in this table, and then click Continue.

   Field	Non-Executive Value	Executive Value
   Name	Employee Check Source	Executive Direct Deposit Source
   Bank Account Name	InFusion US Your Bank	InFusion US Bank of America

   
   

   Note

   Keep your payment source names as specific as possible for each scenario. This will help when managing more complicated combinations of organization payment methods and payment rules.

7. For the third-party organization payment method for non-employee payments, in the Payment Sources section under Third-Party Payment Sources, click Create.

   Perform this step twice, once for each payment source.

   On the Create Payment Source page, complete the fields as shown in this table, and then click Continue.

   Field	First Source Value	Second Source Value
   Name	Texas Check Source	California Check Source
   Bank Account Name	Comerica Bank	Bank of the West

   
   

   Note

   If a single organization payment method has payment sources defined for both employees and third parties, the names of the payment sources must not be the same.

8. Click Submit.

Creating Payment Rules

In this example, the organization payment method you set up for the external third-party payments with two different payment sources requires payment rules to determine how payments are distributed.

Perform these steps for the In-State Consultant Check organization payment method created in the previous task.

1. In the Search section of the Manage Organization Payment Methods page, select your legislative data group, and then click Search.
2. In the Search Results section, click the Edit icon in the Update Status column for the row showing the In-State Consultant organization payment method.
3. Click Yes if a message displays confirming you want to correct the record.
4. In the Payment Method Rules section under Third-Party Payment Sources, click Create and select the values shown in this table to create two payment rules that map a payment source to a tax reporting unit.

   Field	Texas Check Source	California Check Source
   Default	No	No
   Tax Reporting Unit	Texas TRU	California TRU
   Payment Source	Texas Check Source	California Check Source

   
   
5. Click Submit.

Adding EFT File Information

In this example, the bank information for the EFT payments to executive employees must be added.

When you select the EFT payment type, you can enter EFT information at the organization payment method level, the payment source level, or both. Entries at payment source level take priority over entries at organization payment level. In this example, the EFT information is set at the organization payment method level because the US company requires notification of any electronic transfers of funds 10 days prior to the planned transfer date.

1. In the Search section of the Manage Organization Payment Methods page, select your legislative data group, and then click Search.
2. In the Search Results section, click the Edit icon in the Update Status column for the row showing the Executive Direct Deposit organization payment method.
3. Click Yes if a message displays confirming you want to correct the record.
4. In the Electronic Funds Transfer File Information section, enter values as shown in this table.

   Field	Value
   Prenotification Required	Yes
   Prenote Days	10

   
   
5. In the Payment Rules area, ensure that the Executive Direct Deposit Source is selected as the default payment source.
6. Click Submit.

Third-Party Payment Methods: Explained

Use the Manage Third-Party Payment Methods task to create payment methods for all external payees who are not on the payroll. A third party can be either a person or an organization. Payments to third parties are normally involuntary deductions, such as court-ordered garnishments.

For all third-party payment methods, the organization method that determines the payment source to use must already be defined. Use the Manage Organization Payment Methods task in the Payment Distribution work area to define the payment source for third-party payments.

Payments to Persons

When you create a third-party payment method for a person, you select the payroll relationship for the employee whose pay is subject to the deduction. This makes the third-party person payment method available for selection as a payee on the employee's involuntary deduction card.

For example, you might set up an electronic funds transfer (EFT) payment to Mary Smith for a child-support deduction for employee John Smith. When you create the third-party payment method, you select the payroll relationship for John Smith. When you add the child support order to John Smith's involuntary deduction card, you can select Mary Smith in the Order Amount Payee field.

Payments to Organizations

When you create a third-party payment method for an organization, you select External Payee in the Party Usage Code field to make the organization available for selection as a payee on the employee's deduction card.

For example, you might set up an EFT payment method for a County Sheriff that receives a processing fee on garnishment payments. When you create the payment method, you designate the County Sheriff as an External Payee. When you add the garnishment order to the employee's involuntary deduction card, you can select the County Sheriff in the Processing Fee Payee field.

Manage Payroll Definitions

Payroll Definitions: Explained

Payroll definitions contain calendar and offset information, which determines when payments are calculated and costed. Using payroll definitions, you can specify payment frequency, processing schedule, and other parameters for a particular payroll. Payroll period types, such as weekly or monthly, determine the interval at which you pay employees.

Each payroll definition can use only one payroll period type, and you must set up at least one payroll definition for each payroll period type that you use to pay employees. For example, to pay employees semimonthly, create a payroll definition using the semimonthly payroll period type, ensuring that tax calculations and other calculations will produce correct results for those employees.

When you create a payroll definition, the complete payroll schedule is automatically generated, based on the payroll period type, any offsets or calendar adjustments, and the number of years that you specify. Once you have saved a payroll definition, you can assign employees to it on the Manage Payroll Relationships page.

A common scenario for modifying an existing payroll definition is to increase the number of years and generate more payroll time periods to extend the payroll calendar. A common scenario for creating a payroll definition is to replace one that is expired or end-dated.

Each payroll must belong to a consolidation group, which is required by the application for processing purposes. Before you can create a payroll definition, the legislative data group and the consolidation group to use for it must already be defined.

Managing Payroll Definitions: Points to Consider

When you create or modify payroll definitions, the application automatically generates a calendar of payroll periods based on your selections. The choices you make for the following values determine exactly how the schedule of payroll periods is generated:

• Effective start date

• First period end date

• Number of years

• Offsets

• Changes to specific dates

Effective Start Date

The effective start date is the first date that the payroll definition can be used for employee data. The start date must be on or before the earliest date of any historical data you want to load. For example if you want a payroll to be in use starting on 1/1/2013, and you have 5 years of historical payroll data to load, then the start date of the payroll definition must be on or before 1/1/2008.

The effective start date does not affect the generated calendar of payroll periods. The start date for the first payroll period is based on the first period end date.

First Period End Date

The first period end date is the end date of the first payroll period that the application generates for a payroll definition. It is typically based on the date of implementation, tax year, benefits enrollments, or a particular payment cycle. For example, if your weekly payroll work week is Saturday through Friday, and your first payment date is planned to be on 1/6/12, you could use 12/30/11 as your first period end date.

Number of Years

The number of years you enter represents how many years of time periods to generate starting from the beginning of the first payroll period. For example, a payroll definition with an effective start date of 1/1/1985, a payroll period type of semimonthly, a first period end date of 6/15/2012, and the number of years as 5 would generate a calendar of payroll time periods from 6/1/2012 through 5/31/2017. Once you save a payroll definition, you can later only increase but not reduce its number of years because a calendar of time periods for the payroll has already been generated.

Offsets

Depending on the payroll period type, you can elect for your payroll cycle events to occur on specific dates or be based on offsets from period start or end dates.

This table describes the predefined payroll cycle events that you can offset.

Dynamic Offsets

When creating a payroll definition, you can use dynamic offsets for payroll cycle events. All of the predefined payroll time periods you can use support dynamically generated dates for offsets. Using dynamic offsets, you have the option to offset each payroll cycle event by a specified number of calendar or work days before or after the start date or the end date of the payroll period. For example, you might want to set the payroll run date three work days before the payroll end date, which accommodates differences in the number of days in the payroll period and also accounts for weekends and holidays.

Fixed-Date Offsets

The predefined Monthly (Calendar) payroll time period supports using both dynamic offsets and fixed-date offsets. Using fixed dates, you can adjust the exact date of each of the payroll cycle events for the first payroll period and any adjustments that you make will be reflected in the payroll calendar for subsequent payroll time periods. For example, you might set the cutoff date as the 25th of the month and the payroll run date as the 26th of the month, then all payroll periods in the calendar will have those offsets.

Specific Date Adjustments

Once you have generated the payroll time periods, you can further adjust any specific calendar dates, as desired. For example, if you know of a particular bank holiday that falls on a payroll run date or a payment date, you might want to adjust the dates manually on the payroll calendar's time period. You can make these adjustments when creating a payroll definition or any time after then, as long as the time period is in the future.

Creating Payroll Definitions: Worked Example

This example demonstrates how to create two payroll definitions for different payment frequencies that are associated with one consolidation group and one legislative data group.

The following table summarizes the key decisions for this scenario.

In this example, the InFusion US company is creating payrolls for its employees. There are two sets of employees, permanent employees who are paid a set amount on a semimonthly basis, and temporary employees that are paid using time card data on a monthly basis.

The business requires that a single monthly costing process be run against results from different payroll runs by using the consolidation group name as an input parameter in the costing run. This example creates two payroll definitions with different payment periods, but the same consolidation group. Both definitions are effective starting on 1/1/11 and will generate payroll time periods covering 5 years.

Prerequisites

1. Ensure that the legislative data group for your payrolls exists, such as InFusion US LDG.
2. Ensure that organization payment methods exist for your payrolls, such as InFusion US Emp Check and InFusion US Emp EFT.
3. Create a consolidation group named InFusion US Emp Group assigned to the InFusion US LDG legislative data group.

Create the Payroll Definitions

Create two payroll definitions:

• One for permanent employees that are paid a flat amount by electronic funds transfer (EFT) on a semimonthly basis. This payroll definition includes dynamically generated offset dates.

• One for temporary employees that are paid by check using time card data on a monthly calendar basis.

Perform the following steps twice, first using the semimonthly values and then using the monthly values.

1. In the Payroll Calculation work area, click Manage Payroll Definitions.
2. In the Search Results section of the Manage Payroll Definitions page, click the Createicon.
3. Select the InFusion US LDG legislative data group from the list.
4. Enter 1/1/11 as the effective start date you want the payroll to be available for use, and then click Continue.

   In this example, all employees that will use this payroll definition are hired after 1/1/11, so there is no issue with loading historical employee data.

5. In the Basic Details section, complete the fields as shown in this table, and then click Next..

   Field	Semimonthly Value	Monthly Value
   Name	InFusion US Emp Semimonthly	InFusion US Emp Monthly
   Reporting Name	InFusion US Semimonthly	InFusion US Monthly
   Consolidation Group	InFusion US Emp Group	InFusion US Emp Group
   Period Type	Semimonthly	Monthly (Calendar)
   First Period End Date	6/15/12	6/30/12
   Default Payment Method	InFusion US Emp EFT	InFusion US Emp Check

   
   
6. On the Payroll Offsets page, in the Number of Years field, enter 5.
7. For the semimonthly payroll, use dynamic variables to define offsets as shown in this table, and then click Next.

   Field	Falls Value	Day Type Value	Offset Value	Base Date Value
   Cutoff Date	5	Work Days	Before	Period End Date
   Payroll Run Date	3	Work Days	Before	Period End Date

   
   
8. For the monthly payroll, use fixed dates to define offsets as shown in this table, and then click Next.

   Field	Value
   Fixed Date	Yes
   Cutoff Date	6/25/12
   Date Earned	6/30/12
   Payroll Run Date	6/27/12
   Date Paid	6/30/12

   
   
9. On the Payroll Calendar page, adjust payroll days to account for a bank holiday, as shown in this table.

   Column	Semimonthly Value	Monthly Value
   Payroll Run Date	Old Value: 11/28/13 New Value: 11/27/13	Old Value: 5/27/13 New Value: 5/28/13

   
   
10. Click Next.
11. Review the details of the payroll definition, and then click Submit.

FAQs for Manage Payroll Definitions

When would I close a payroll period?

Closing a payroll period can interfere with changes to recurring entries. Payroll periods are not like General Ledger periods. You do not need to close payroll periods.

Why can't I select a payment method when creating a payroll definition?

There are two reasons why you might not be able to view and select the payment method you are looking for. Either the start date of the payroll definition is before the start date of the organization payment method or the organization payment method has no associated payment source.

Manage Fast Formulas

Using Formulas: Explained

Fast formulas are generic expressions of calculations or comparisons that you want to repeat with different input variables.

You can use fast formulas to:

• Calculate payrolls

• Define the rules for paid time off accrual plans

• Define custom calculations for benefits administration

• Validate element inputs or user-defined tables

• Edit the rules for object group population for elements or people

• Calculate absence duration

• Define custom configuration for compensation

Calculate Payrolls

Write payroll calculations and skip rules for elements that you define to represent earnings and deductions. Associate more than one formula with each element to perform different processing for employee assignments with different statuses. You can define elements and formulas for earnings and deductions with highly complex calculations requiring a number of different calls to the database.

Define the Rules for Paid Time Off Accrual Plans

Edit the delivered accrual type formulas or write your own. Each accrual plan needs two formulas: one to calculate the gross accrual and the other to return information to the PTO carry-over process.

Define Custom Calculations for Benefits Administration

Configure your plan design to the requirements of your enterprise. Formulas provide a flexible alternative to the delivered business rules for such purposes as:

• Date calculations, such as enrollment start and end dates, rate or coverage start and end dates, waiting periods and enrollment periods, or action item due dates

• Calculations of rate and coverage amount, minimum and maximum, or upper and lower limits

• Certification requirements

• Partial month and proration calculations

• Eligibility and participation evaluation

For example, you can write a formula to calculate benefits eligibility for those cases where the provided eligibility criteria does not accommodate your particular requirements.

For more information, see Benefits Fast Formula Reference Guide (1456985.1) on My Oracle Support at https://support.oracle.com.

Validate Element Inputs or User-Defined Tables

Validate user entries into element input values using lookups or maximum and minimum values. However, for more complex validations write a formula to check the entry. Also, use a formula to validate entries in user tables.

Edit the Rules for Populating Work Relationship or Payroll Relationship Groups

Define criteria to dynamically populate a payroll relationship group or work relationship group. When you create a formula of type Payroll Relationship Group or Work Relationship Group, the Create Fast Formula page provides an expression editor to help you build the selection criteria.

Calculate Absence Duration

Calculate the duration of an absence from the start and end dates.

Define Custom Configuration for Compensation

Extend the existing flexibility of compensation plan configuration by writing formulas to customize:

• Start and end dates for compensation allocations under individual compensation plans

• Person selection, hierarchy determination, column default values, and currency selection for workforce compensation plans

• The source of items displayed in total compensation statements

Writing a Fast Formula Using Formula Text: Worked Example

This example demonstrates, using the text editor, how to create a fast formula that returns the range of scheduled hours for managers and a different range for other workers.

The following table summarizes key decisions for this scenario:

Creating a Fast Formula Using the Text Editor to Determine a Manager's Scheduled Hours

1. On the Payroll Calculation Tasks page, click Manage Fast Formulas to open the Manage Fast Formulas page.
2. On the Manage Fast Formula page, click the Create icon to create a new formula.
3. On the Create Fast Formula page, complete the fields as shown in this table.

   Field	Value
   Formula Name	Manager Range of Scheduled Hours
   Formula Type	Range of Scheduled Hours
   Description	Manager's Range of Hours
   Effective Start Date	1-Jan-2010

   
   
4. Click Continue.
5. Enter the following formula details in the Formula Text section:

   /* DATABASE ITEM DEFAULTS BEGIN */
   DEFAULT FOR asg_job IS ' '
   /* DATABASE ITEM DEFAULTS END */
   JOB_1 = ASG_JOB
   IF JOB_1 = 'Manager' then
   (MIN_HOURS = 25
   MAX_HOURS = 40
   FREQUENCY = 'H')
   else
   (MIN_HOURS = 20
   MAX_HOURS = 35
   FREQUENCY = 'H')
   return MIN_HOURS, MAX_HOURS, FREQUENCY
   

    

6. Click Compile.
7. Click Save.

Writing a Fast Formula using Expression Editor: Worked Example

This example demonstrates how to create a fast formula that groups executive workers for reporting and processing. All executive workers are in department EXECT_10000. Once the formula is created it will be added as object group parameters so that only those workers in department EXECT_10000 are used in processing.

The following table summarizes key decisions for this scenario:

Creating a Fast Formula Using the Expression Editor

1. On the Payroll Calculation Tasks page, click Manage Fast Formulas to open the Manage Fast Formulas page.
2. On the Manage Fast Formula page, click the Create icon to create a new formula.
3. On the Create Fast Formula page, complete the fields as shown in this table.

   Field	Value
   Formula Name	Executive Payroll Relationship Group
   Type	Payroll Relationship Group
   Description	Executive Workers
   Legislative Data Group	Vision LDG
   Effective As-of Date	1-Jan-2010

   
   
4. Click Continue.
5. In the Formula Details section, click Add After to add a row to enter the fields in this table.

   Conjunction	Database Item Name	Data Type	Operand	Literal Value
   IF	DEPARTMENT	Character	=	'EXECT_10000'
   Then	SELECT_EMP	Character	=	'YES'
   ELSE	SELECT_EMP	Character	=	'NO'

   
   
6. Click Compile.
7. Click Save.

Formula Compilation Errors: Explained

Compilation errors display in the Manage Fast Formulas page when you compile the formula. The formula compiler returns line numbers starting at 1 from the beginning of a formula, and character positions starting at 1 from the beginning of a line in its error messages. The compiler aborts compilation when an error is encountered.

Common Compilation Errors

This table lists the type and description of several common formula compilation errors.

Formula Execution Errors: Explained

Fast formula execution errors occur when a problem arises while a formula is running. The usual cause is a data problem, either in the formula or in the application database. These errors contain the formula line number where the error occurs.

Formula Execution Errors

This table lists the type and description of each formula execution error.

FAQs for Manage Fast Formulas

When do I run the Compile Formula process?

If you need to compile many fast formulas at the same time, you can run the Compile Formula process on the Submit a Process or Report page. Also, if you make any changes to a function after you have compiled a formula that uses it, you need to recompile the formula for the changes to take effect.

What's the difference between a formula compilation error and an execution error?

Compilation errors occur in the Manage Fast Formulas page when you compile the formula. An error message explains the nature of the error. Common compilation errors are syntax errors resulting from typing mistakes.

Execution errors occur when a problem arises while a formula is running. The usual cause is a data problem, either in the formula or in the application database.

Manage Balance Definitions

Balance Definitions: Explained

Payroll balances show the accumulation of values over a period of time. The values can be currency, hours, or any other numeric value. You manage balance definitions from the Payroll Calculation work area. Most of the balances you require are predefined and additional balances are created automatically when you create elements. You can edit the definition of these generated balances, or create additional balances for calculations or reporting.

When you create a balance definition, you select the balance category and a unit of measure. Each balance definition is grouped in a predefined balance category for quicker processing. Balance categories are legislation-specific and cannot be modified. The predefined units of measure available for selection are Day, Hour (with different combinations of minutes and seconds), Integer, Money, and Number.

You can use the batch loader from the Payroll Administration work area or Data Exchange work area to create multiple balance definitions at the same time.

Important aspects of balance definitions are:

• Balance Dimensions

• Balance Feeds

• Generated Balances and Database Items

• Base Balances

• Remuneration

Balance Dimensions

Each balance can have multiple dimensions, which define the specific value to be retrieved. Balance dimensions are predefined and typically combine these components:

• Time span, such as run, period to date, or fiscal year to date

• Employment relationship level, either assignment, terms, or payroll relationship

• Context, required for some balances only, such as tax reporting unit, element, or payroll

For example, if you select the dimension Core Assignment Tax Unit Year to Date for the balance Gross Earnings, you create the defined balance GROSS_EARNINGS_ASG_TU_YTD, which accumulates gross earnings for an assignment in a specific tax reporting unit from the beginning of the calendar year to date.

Balance Feeds

You can define balance feeds by element input values or by balance classification run results.

• Balance Feeds by Element

  Balance feeds by element indicate one or more element input values to add or subtract from a balance. For each balance feed, all elements must be of the same data type. For example, you would not mix money and hours in the same balance feed.

  If a balance is fed by a single element, it is called a primary balance.

• Balance Feeds by Classification

  Balance feeds defined by primary or secondary element classification are always payroll run result values.

  If you add a primary classification as a balance feed, you cannot add the children of this classification from the secondary or subclassifications. For example, if you use the Supplemental Earnings primary classification as a balance feed, you cannot also use any secondary or subclassification that are children of Supplemental Earnings. Also, you cannot use both secondary classifications and subclassifications in the same balance feed.

For any balance that you need to initialize, regardless of whether it is fed by elements or classifications during normal processing, you can select elements to feed it for balance initialization purposes only. Select one element for each level of the employment hierarchy associated with a dimension that you want to initialize.

Generated Balances and Database Items

When you create elements, balances and balance feeds are created automatically as determined by the element template. A database item is generated automatically for each balance dimension. You can use the database items in your formulas to check the value of a balance.

Base Balances

You can specify a base balance when there is a relationship between balances that can be relied on when processing and reporting. For example, Loan Repayment could be the base balance for Loan Repayment Arrears.

Remuneration

One balance in a legislation is predefined as the remuneration balance, which is used to generate payments for employees. For example, the remuneration balance might be Net Pay, which is a calculated balance that is the sum of standard earnings and supplemental earnings minus all the deductions calculated for the run.

Load Initial Balances

Initial Balance Loading: Explained

Setting initial balances values is an essential task when you migrate payroll data from another system. First you load balance values into batch views then submit the Load Initial Balances process from the Payroll Calculation work area. The process validates then processes the batch.

Balance Initialization Elements

For each balance to be initialized, you must create elements in the Balance Initialization classification and add them to the balance as balance feeds. You can create up to three elements: one to initialize assignment level balances, one for employment terms level, and one for payroll relationship level.

Each balance initialization element must:

• Be nonrecurring and for balance adjustments only.

• Be processable in the payroll run.

• Have an input value to feed the balance and an input value for each context required by the balance. If you need to set initial values for a large number of balances you can define multiple input values for a single element with each input value feeding a different balance.

• Have an eligibility record associated with it, with an early effective start date.

Batch Views

Populate the batch views with the balance values for the initialization date. You can use the Batch Loader spreadsheet, or populate the batch directly using the API in the PAY_BALANCE_BATCH_LINES_PKG API package. You can download the Batch Loader spreadsheet in the Payroll Administration work area.

The views are:

• PAY_BALANCE_BATCH_HEADER

• PAY_BALANCE_BATCH_LINES

When you create the batch header and lines, consider the following points:

• Divide your employees into separate batches to limit the size of each batch.

• Within a batch, ensure that you include batch lines for every balance to be initialized for a person. You cannot split lines for a person across multiple batches.

• The date you specify on the batch header applies to all lines unless you enter an override date at the line level. The date at line level must be on or before the date on the header.

• You cannot initialize balances once you have run any payroll processes.

• Every line must include a value for payroll relationship number. If the line is initializing a terms-level balance, you must also enter a term number. If the line is initializing an assignment-level balance, you must also enter a term number and an assignment number.

Initial Balances: How They Are Loaded

The Load Initial Balances process validates then processes the initial balance values you load into batch views. It creates balance adjustments to set the required values.

Settings That Affect Initial Balances

The data you load into the batch views determines which defined balances are initialized and the values used. Typically, you group employees into batches to manage the initialization of their balances.

How the Balances Are Initialized

The Load Initial Balances process validates that the entities referenced in the batch data exist, including balances, balance dimensions, tax reporting units, payrolls, payroll relationships, employment terms, and assignments. It checks that values are available for the contexts used by each balance dimension. It does not check, for example, that an employee is assigned to a specified organization. It sets the status of valid batch lines to V.

The process creates balance adjustments. For all the batch lines it successfully processes, the process sets the status to T and updates the PAYROLL_REL_ACTION_ID to point to the balance adjustment.

Examples

The following table shows a simple three-line batch loaded on 18 June.

For this batch, the process creates an adjustment on the first day of the time period relevant to each dimension, as shown in the following table:

Balance Batch Header and Lines Views

The PAY_BALANCE_BATCH_HEADER and PAY_BALANCE_BATCH_LINES views hold the data used by the Load Initial Balances process to initialize balance values.

You must load data into these views using the Batch Loader spreadsheet or API in the PAY_BALANCE_BATCH_LINES_PKG PL/SQL package. Create each batch line with a BATCH_LINE_STATUS of U (unprocessed) and leave the PAYROLL_REL_ACTION_ID column blank. The batch upload process updates these two columns.

Required Columns

In PAY_BALANCE_BATCH_LINES, the columns shown in the following table are required. Where there is both an ID column and a name column for the same entity, for example, PAYROLL_ASSIGNMENT_ID and ASSIGNMENT_NUMBER, you can populate either column, but you must populate at least one. If the ID column is left blank, the batch upload process uses the name column value to derive the ID value.

Core Context

The core contexts shown in the following table must be populated if the balance dimension expects a value for this context.

Legislative or User-defined Context Columns

There are six legislative or user-defined contexts, which must be populated if the balance dimension expects a value for these contexts. For each context, there is a context ID, name, and value. For example:

• CONTEXT1_ID + CONTEXT1_NAME

• CONTEXT1_VALUE if CONTEXT1 is used by the balance dimensions

Populate CONTEXT[1-6]_NAME with the name of the context usage for that legislative or user-defined context, and CONTEXT[1-6]_VALUE with the actual value of that context.

Manage Elements

Elements: How They Work in Salary, Absence, Benefits, and Payroll

Elements are building blocks that help determine the payment of base pay, benefits, absences, and other earnings and deductions. The components of elements are set up differently based on how the element is to be used.

Base Pay Management

To manage base pay, you attach a single earning element to each salary basis to hold base pay earnings, and assign a salary basis to each worker. When a manager or compensation specialist enters a base pay amount for a worker, the amount is written to the payroll element input value associated with the worker's salary basis and used in payroll processing to generate payment amounts.

Absence and Accruals

You can manage employee absences and leave time. To facilitate reporting and analysis of employee absences, you can distinguish between absence categories, absence types, and absence reasons. You can associate an absence type with an element to maintain an absence balance for an employee. You can associate absence types and other elements with accrual plans to determine the net accrual of an employee.

Benefits

Attach elements at various levels in the benefits object hierarchy to create deductions and earnings that can be processed in a payroll run to calculate net pay.

Payroll

For Oracle Fusion Global Payroll, you define earning and deduction elements, such as bonus and overtime earnings and involuntary deductions. These elements incorporate all the components required for payroll processing, including formulas, balances, and formula result rules.

Elements: Explained

Elements are the building blocks of payroll and benefits. There is no limit to the number of elements you can define. You define the policies or business rules that govern the allocation of these elements to your workers.

Elements can represent:

• Earnings, such as salary, wages, and bonuses

• Compensation, such as employee stock purchase and insurance plans

• Absences from work

• Tangible items distributed to persons, such as tools, uniforms, mobile phones, or computers

• Statutory deductions, such as taxes, voluntary deductions, such as contributions to charities or savings plans, and involuntary deductions, such as court orders, as well as pretax deductions

• Employer taxes and other employer liabilities

Oracle Fusion supplies many predefined elements while additional elements are generated when you define certain types of compensation and payroll elements through templates.

Predefined Elements

The predefined elements are specific to your localization. They typically include deductions for tax and wage attachments. You cannot make any changes to these predefined elements.

Element Creation

You can create many earnings and deductions from element templates. The templates include the elements, balances, balance feeds, and formulas required for payroll processing. You can configure any of these definitions to match your specific business requirements.

The components of an element's definition are available for entry based on the primary and secondary classification you select, for example a standard earning. This diagram illustrates element definition components and what is defined in each component.

For example, you can define an element called Wage, for hourly paid workers. You classify the element in the predefined classification Earnings, which determines when it is processed in the payroll run and what payroll balances it feeds.

You must specify at least one input value, in this case Hours Worked, which must be entered in each payroll period. If required, you can define multiple input values with fixed values, defaults, or validation.

You associate a formula with the element, to calculate the wage for the payroll period. A simple formula might be hours worked, from the input value, multiplied by an hourly rate, from compensation information on the employment record. You define who is eligible for the element by assigning eligibility criteria to various components in the persons employment record, such as grade, payroll, salary basis, or organization. In this example, the wage element is available to all persons on the weekly payroll.

You can use the batch loader from the Payroll Administration work area or the Data Exchange work area to load elements.

Maintaining Elements: Explained

After you have defined and used an element, updates to the element are limited to ensure the integrity of the element for retroactive processing and the balances of the input values. You cannot remove existing input values or add new ones if you have created entries for the element. You must add an input value to an element before you create any element entries, or set the element entries effective date to the element's start date.

You can make the following changes to an element that has been previously processed:

• Change a required input value to be optional.

• Alter the sequence in which input values appear in the Element Entries flow.

• Change the input value validation rules for minimum, maximum, lookup, or formula.

• Change your specification of which input values create database items.

Determining Entry Values for an Element: Critical Choices

You can select rules for an element to define how you can update its element entries. The options include:

• Automatic entry

• Allow multiple entries in same period

• Additional entry

Automatic Entry

When you create an element, you can select Yes for the question: Should every person eligible for the element automatically receive it? This setting selects the Automatic entry option by default for all eligibility records you create for that element. However, you can override the selection for any specific eligibility record before you save it.

When you select this option, saving the eligibility record initiates a payroll flow to create element entries for all eligible workers. You can view the progress of the process in the Automatic Entry Status field. If the status shows that an error occurred, you can save the eligibility record again to resubmit the flow. If you have access to payroll work areas, you can also monitor the progress of the Generate Automatic Element Entries flow by navigating to the Processes and Reports tab through the Payroll Dashboard, Checklists work area, or Payroll Calculation work area.

Afterward, any updates to the employment records of eligible workers, including hires and terminations, automatically update, create, or end the element entries, as appropriate.

If you select the Automatic entry option for an eligibility record, provide a default value for any required input values.

Allow Multiple Entries in Same Period

This option enables you to give a person more than one entry of the element in the same pay period. For example, if you enter overtime hours on a weekly basis for monthly-paid persons, you might need to give a person five entries of an overtime element in each period.

If you are creating a net-to-gross element, you must select Allow multiple entries in same period.

Additional Entry

This option allows you to add an occasional one-time entry for recurring elements. This additional entry can override or add to the normal entry amount.

Determining an Element's Latest Entry Date: Critical Choices

An element's latest entry date determines how element entries process after a person is terminated or transferred to another payroll. The options are:

• Final close

• Last standard earning date

• Last standard process date

Final Close

This option allows the element to stay open for entries beyond a persons last day worked. For example, you want the element to stay open to pay a severance package to a terminated person.

Last Standard Earning Date

This option stops all element entries on the date the person leaves. It is recommended to use this option for recurring entries such as salary.

Last Standard Process Date

The last standard process date defaults to the last day of the pay period in which the person is terminated, but you can set it to a later period when you terminate a person. It enables all element entries to stop on the last standard process date or on the date the assignment ends, if this is earlier.

Element Input Values: Explained

An element's input values defines the entry values available on each entry of this element. Each input value has a unit of measure defined, and can have validations and conditions defined to control the data entry of the element entry assigned to a person. For example, an earnings element may have an input value for hours worked, which is defined as required and has a unit of measure of number.

When you create an element, some input values are created automatically if you use Oracle Fusion Global Payroll or Oracle Fusion Global Payroll Interface. For Global Payroll Interface, this applies to earnings elements only. You can create additional input values for any element, as needed.

Input Value Options

For each input value created you can modify these attributes:

Element Result Rule Options: Explained

At minimum, an element needs one standard processing rule. This identifies the formula the payroll run uses to process the element for persons with an active employment record. It is also the default formula for other assignment statuses. However, you can define additional processing rules if you need to use different formulas for assignments at other statuses. For example, you could have two rules for a Wages element: Standard Wages and Paid Training Leave.

You can add one or more of the following optional results rules to an element:

• Direct result

• Indirect result

• Message

• Order indirect

• Stop

• Target indirect

For all formula result types except Direct Result or Message, select the target element name to which you want to pass the formula result. This element must have a processing priority causing it to process after the element sending the result.

For the formula result types Direct Result, Indirect Result, and Target Indirect, select the target input value to update.

Direct Result Rule

This is the element's run result, or a direct result updating one of the element's input values.

Indirect Result Rule

This result passes as an element entry to another nonrecurring element not yet processed.

Message Rule

The formula issues messages under certain conditions. For example, a formula can check a loan repayment balance and, if the balance is zero, issue the message "Loan is repaid."

There are three severity levels for a message rule:

• Error

  This causes the run to roll back all processing for the employment record.

• Warning

  This does not affect payroll processing but warns you of a possible problem.

• Information

  This does not affect payroll processing.

Order Indirect Rule

This result updates the subpriority of the element you select in the Target Element Name field.

Stop

This formula result uses the Date Earned of the payroll run to put an end date on a recurring entry of this or another element (which must be defined with Allow Multiple Entries not selected).

Target Indirect

This result updates recurring entries of this or another element on the effective date of the payroll run. The receiving element must be defined with Allow Multiple Entries not selected unless you are passing a recurring element's entries to itself, that is updating another entry of the same element. With this result rule, any future-dated changes to the entry will be overwritten by the results of the current payroll run.

Element Eligibility: Explained

Element eligibility determines which people are eligible for an element. To determine eligibility, you assign element eligibility criteria to the components that persons must have to receive entries of the element. While some elements may represent compensation, deductions, and equipment available to all persons, many elements are available only to certain groups of persons. For example, your enterprise might provide company cars only to persons in the Sales Department. Eligibility criteria rule out the possibility of persons getting element entries by mistake. For example, you might want to give a production bonus only to those persons who work full time in Production and are on the weekly payroll. To do this you would define eligibility criteria for the element Production Bonus and the combination of the Production organization, the Full-Time assignment category, and the Weekly payroll.

Eligibility Criteria

Element eligibility can be assigned by many different criteria.

• All payrolls or for specific payrolls

• Payroll statutory unit

• Legal employer

• Payroll relationship type

• Department in which the person works

• Location of person's office

• Job, for example, Associate Professor or Secretary

• Grade

• Groups to which the person belongs. You set up all the groups that are appropriate for your enterprise. For example, you could decide to group persons by company within a multi-company enterprise, and by union membership.

• Position, which is a class of job performed in a particular organization, for example, Associate Professor of Chemistry, or Finance Department Secretary.

Multiple Rules of Eligibility

You can define more than one eligibility criteria for each element but there must be no overlap between them. For example, you could create one criteria for the combination of grade A and the job Accountant. However, you could not create one criteria for grade A and a second for the job Accountant. This would imply that an accountant on grade A is eligible for the same element twice. If you have more than one criteria for an element, you can enter different default values, qualifying conditions, and costing information for each eligibility group.

Maintaining Element Eligibility: Explained

Element eligibility rules always control element entries.

After you have used an element you can make the following changes to the eligibility rules:

• Change the input value default values and validation.

  These changes affect all new entries. Changes to run time defaults affect existing entries. The system also uses the new validation rules to check any updates you make to existing entries.

• Date-effectively end all of the rules that apply to an element and define a new set of rules, which are effective from a later date. For example, suppose you have defined eligibility for a company car based on grade. Following a change of policy you must now define eligibility based on job.

  • You will not be allowed to end the element eligibility if any nonrecurring entries exist at the date you want to end the rule. You must delete existing entries before you end the element's eligibility.

  • You can end the element eligibility if recurring entries exist. Any existing entries will be ended automatically when you end the element's eligibility.

• Change the qualifying conditions of age and length of service that persons must meet to be eligible for the element.

Creating Earnings Elements for Payroll: Worked Example

The example shows how payroll managers create a regular earnings element using an element template.

First you create an earning element then update it to allow for multiple entries.

Creating an Earnings Element

1. In the Payroll Calculation work area, click Manage Elements.
2. Click Create.
3. Complete the fields, as shown in this table.

   Field	Value
   Legislative Data Group	Your Legislative Data Group
   Primary Classification	Standard Earnings
   Secondary Classification	Regular

   
   
4. Click Continue.
5. On the Basic Details page, complete the fields, as shown in this table.:

   Question	Answer
   Name	REGULAR SALARY
   Reporting Name	Regular Salary.
   Effective Date	1/1/2010
   Input Currency	US Dollar
   Should every person eligible for the element automatically receive it?	No.
   What is the earliest entry date for this element?	First Standard Earnings Date
   What is the latest entry date for this element?	Last Standard Earning Date
   At which employment level should this element be attached?	Assignment Level
   Does the element recur each payroll period, or does it require explicit entry?	Recurring
   Process the element only once in each payroll period?	Yes
   Can a person have more than one entry of the element in a payroll period?	No
   Process and pay element separately or with other earnings elements?	Process and pay with other earnings

   
   
6. Click Next.
7. On the Additional Details page, complete the fields, as shown in this table.

   Question	Answer
   What is the calculation rule?	Flat Amount
   How do you want to derive the amount?	Entered value
   What is the time-basis for this element?	Periodically
   Is this element subject to proration?	No
   Is this element subject to retroactive changes?	No
   Use this element to calculate a gross amount from a specified net amount?	No
   Should this element reduce regular earnings?	No

   
   
8. Click Next.
9. Verify the information is correct.
10. Click Submit.

Reviewing an Earnings Element

On the Element Summary page, review the newly created element details for accuracy.

1. Review the basic details for the earnings element, for example Element Name, Classification, and Description.
2. In the Standard Rules section, verify that the element is recurring.
3. Verify that the employment level is assignment level.
4. In the Currency section, verify that the currency is US Dollars.

Updating an Earnings Element

On the Element Summary page, update the newly created element details.

1. Click Edit Element.
2. Select today's date.
3. Click Continue.
4. Scroll to the Standard Rules region.
5. In the Entry Options section, select the Allow multiple entries in same period option.
6. Click Save.
7. In the Element Overview section, select the expand arrow.
8. Expand the Input Value folder.
9. Select Pay Value.
10. Select Edit Element.
11. Select today's day on the window, and click Continue.
12. In the Element Overview section, Select Actions, Create Element Eligibility Criteria.
13. On the Element Eligibility name field, enter REGULAR SALARY ELIG.
14. In the Eligibility Criteria section, select All payrolls eligible.
15. Click Save.
16. Click Submit.

Creating Payroll Elements for Compensation: Worked Example

This example demonstrates how to create payroll elements for salary bases (base pay) as well as individual and workforce compensation plans using the US legislative data group.

The following table summarizes key decisions for each element that you create and provides the selections for this example.

To create payroll elements for salary bases and compensation plans, you perform these tasks:

1. Create the element.

2. Enter basic information.

3. Enter additional details for standard earnings elements, if you also implemented Oracle Fusion Global Payroll.

4. Review selections and submit the element.

5. Show only the Amount or Rate input value.

6. Set minimum and maximum amounts for supplemental earnings as well as standard earnings elements with a Regular Not Worked secondary classification.

7. Set up open eligibility.

Create Element

1. On the Manage Elements page, click the Create icon.
2. In the Create Element dialog box, select your legislative data group, such as US LDG.
3. Select the primary classification that matches the purpose or use of the payroll element.

   Example Purpose or Use	US LDG Primary Classification
   Recurring base pay, such as annual salaries and hourly earnings	Standard Earnings
   Recurring payments, such as an allowance	Standard Earnings
   Nonrecurring payments, such as a bonus	Supplemental Earnings
   Recurring voluntary deductions, such as savings plans or charitable contributions	Voluntary Deductions

   
   
4. Select the secondary classification that corresponds to the selected primary classification.

   Example Purpose or Use	US LDG Secondary Classification
   Recurring base pay	Regular
   Recurring payment	Regular Not Worked
   Nonrecurring payment	Bonus
   Recurring voluntary deduction	Select the relevant choice. If there is none, leave it blank.

   
   
5. Click Continue.

Enter Basic Information

1. Complete the general fields, as shown in this table.

   Field	Sample Value
   Name	Annual Salary Hourly Wages Allowance Spot Bonus Red Cross Contribution
   Reporting Name	Enter the name that you want to display on reports for this earnings or deduction payroll element.
   Effective Date	1/1/1951 Enter a very early date so that the payroll element is available for use immediately in your salary bases as well as individual and workforce compensation plans.
   What is the earliest entry date for this element?	First Standard Earning Date
   What is the latest entry date for this element?	Last Standard Process Date
   At which employment level should this element be attached?	Match the employment level to the level at which the salary basis is associated with workers, either Assignment Level or Term Level.
   Does this element recur each payroll period, or does it require explicit entry?	For nonrecurring payments such as a bonus, select Nonrecurring. For all other purposes or uses in this worked example, as well as in HCM coexistence implementations, accept the default (Recurring).

   
   
2. To accept the remaining default values, click Next.

Enter Additional Details

These steps apply only to recurring base pay elements when you also implemented Oracle Fusion Payroll. The Compensation application does not display this page if Oracle Fusion Global Payroll is not implemented too.

For hourly payroll elements, in What is the calculation rule?, select Unit X Rate.

For annual salary and Regular Not Worked standard earning elements, complete the following steps.

1. Complete the additional detail fields, as shown in this table

   Field	Sample Value
   Is this element subject to proration?	Yes
   Proration Group	Entry Changes for Proration
   Is this element subject to retroactive changes?	Yes
   Retro Group	Entry Changes for Retro

   
   
2. To accept the remaining default values, click Next.

Review and Submit

1. Review all items to ensure everything is correct.
2. Click Submit.

Show Only Amount or Rate Input Value

For payroll elements associated with salary bases, show only the Amount or Rate (hourly frequency) input value. For individual and workforce compensation plans, show only the Amount input value. Clear the Displayed option for all other input values. Also, for individual compensation plans, in the Special Purpose field, select Primary Input Value.

1. In the Elements Overview region, select the input value that should not be displayed, for example, Periodicity.
2. In the Input Values region, in the Edit menu, select Correct.
3. Click the Displayed option to clear the check mark.
4. Click Submit.
5. Repeat steps 1 through 4 for all remaining input values that should not appear.

Set Minimum and Maximum Amounts

Complete these steps for supplemental earnings elements as well as standard earnings elements with a Regular Not Worked secondary classification.

1. In the Element Overview region, select Amount.
2. In the Input Values region, in the Edit menu, select Correct.
3. In the Default Entry Values and Validation region, enter a minimum or maximum value, or both.
4. Select Warning or Error, as appropriate.

   Value	Usage
   Warning	Display a message to users when they enter an amount that is less than the minimum value (if set) or greater than the maximum value (if set), while still enabling them to continue with their submissions.
   Error	Display a message to users when they enter an amount that is less than the minimum value (if set) or greater than the maximum value (if set) and prevent them from continuing until the amount is within the specified limits.

   
   

Set up Open Eligibility

Set up the element for eligibility without any criteria. For base pay earnings elements, eligibility is determined by the salary basis assigned to the worker. For individual and workforce compensation plans, eligibility for payroll elements is typically determined by eligibility profiles assigned to the plans and options in plans.

1. In the Elements Overview region, select Element Eligibility.
2. In the Actions menu, select Create Element Eligibility Criteria.
3. In the Element Eligibility, General Information region, in the Element Eligibility Name field, enter the element name with the suffix Open.

   Example: For the payroll element Allowance, the element eligibility name would be Spot Bonus Open.

4. Click Submit.
5. Click Done.

Creating Payroll Elements for Global Payroll Interface: Worked Example

The example shows how application implementation consultants create elements for Oracle Fusion Global Payroll Interface using element templates with US classifications.

First you create an element and then update it so that it is available to all payrolls.

The following table summarizes key decisions for each element that you create and provides the selections for this example.

Creating an Element

1. In the Setup and Maintenance work area, click Manage Elements.
2. In the Search Results section, click Create.
3. Select your legislative data group.
4. Select the primary classification that matches the purpose or use of the payroll element.

   Example Purpose or Use	Primary Classification
   Recurring base pay, such as annual salaries and hourly earnings	Standard Earnings
   Recurring payments, such as an allowance	Standard Earnings
   Nonrecurring payments, such as a bonus	Supplemental Earnings
   Recurring voluntary deductions, such as savings plans or charitable contributions	Voluntary Deductions

   
   
5. Select the secondary classification that corresponds to the selected primary classification.

   Example Purpose or Use	Secondary Classification
   Recurring base pay	Regular
   Nonrecurring payment	Bonus
   Recurring voluntary deduction	Select the relevant choice. If there is none, leave it blank.

   
   
6. Click Continue.
7. On the Basic Information page, complete the fields as shown in this table, and then click Next.

   Field	Sample Value
   Name	Annual Salary Hourly Wages Allowance Spot Bonus Red Cross Contribution
   Reporting Name	Enter the name that you want to display on reports for this earnings or deduction payroll element.
   Effective Date	1/1/1951 Enter a very early date so that the payroll element is available for use immediately.
   Input Currency	US Dollar
   Should every person eligible for the element automatically receive it?	No
   What is the earliest entry date for this element?	First Standard Earning Date
   What is the latest entry date for this element?	Last Standard Process Date
   At which employment level should this element be attached?	Assignment Level
   Does this element recur each payroll period, or does it require explicit entry?	For nonrecurring payments such as a bonus, select Nonrecurring. For all other purposes or uses in this worked example, select Recurring.
   Process the element only once in each payroll period?	Yes
   Process and pay element separately or with other earnings elements?	Process and pay with other earnings.

   
   
8. Verify the information is correct, and then click Submit.

Setting Up Element Eligibility and Input Values

On the Element Summary page, update the newly created element details.

1. From the Edit menu, select Update.
2. In the Element Overview hierarchy, select Element Eligibility.
3. From the Actions menu, select Create Element Eligibility.
4. In the Element Eligibility name field, enter the element name with the suffix: Open.
5. For earnings elements, in the Eligibility Criteria section, select All payrolls eligible.
6. For deduction elements, create the primary input value as follows:

   • In the Element Overview hierarchy, select Input Values.

   • From the Actions menu, select Create Input Values.

   • Enter the values shown in the following table.

     
     

     Field	Value
     Name	Period Deduction Amount
     Display Sequence	1
     Special Purpose	Primary input value
     Unit of Measure	Money
     Create a Database Item	Yes

   Note

   Input values for earnings elements are created automatically, so no additional setup is required for earnings elements.

7. Click Save.
8. Click Submit.

Absence Elements

Absence Processing in Payroll Runs: Critical Choices

When you create an absence element for an absence type, your choice of element classification determines how absence entries display on the statement of earnings. You must use one of the following classifications:

• Information classification or Absence classification

• Standard Earnings classification

Using the Information or Absence Classification

Use either of these classifications if you want to:

• Process absences in a single calculation.

• Prevent absence entries from appearing on the statement of earnings that the payroll run generates.

Since payroll runs do not process elements in the Information or Absence classifications, you can use an Earnings element to manage the calculation and payment of absences. For example, you can define a skip rule for an Earnings element that triggers processing when it finds an entry for the absence element. The payroll formula associated with the Earnings element uses the database item of the absence element to retrieve the total number of absences. Then the formula uses another database item to retrieve the salary or hourly rate to calculate the total absence pay for the period and, if necessary, reduce the regular earnings.

The following figure depicts the relation between the Absence element, Earnings element, skip rules, and the payroll formula associated with the Earnings element:

Using the Standard Earnings Classification

Use this classification if you want to:

• Process absences individually in each payroll period.

• Treat absence entries as earnings.

This approach creates a one-line entry on the statement of earnings for each absence type. For example, you can use this classification if your employees submit timecards, and you want absences taken by these employees to show on the statement of earnings.

Recurring and Nonrecurring Absence Elements: Critical Choices

When you set up an absence type, you can determine how absences are processed in payroll runs. Choose the type of element to associate with the absence type:

• Use a nonrecurring absence element.

• Use a recurring absence element (only if you use Oracle Fusion Global Payroll and enable proration).

Using a Nonrecurring Absence Element

Nonrecurring absence elements are valid for the payroll period in which the absence starts. The application creates the entry only when you enter the absence end date. The element entry records the full value of the absence duration even if the end date falls beyond the payroll period.

For example, if you enter an absence that starts on May 24 and ends on June 5 for someone on a monthly payroll, the element entry is dated May 1 to May 31 and records the full value of the absence duration (13 days).

Using a Recurring Absence Element

Use a recurring absence element if you want the payroll run to process absences that have not ended. To process the absence element and calculate the absence duration in each payroll period, you use a payroll formula that handles proration.

Recurring absence element entries start on the absence start date and end on the absence end date (if there is an end date). If the absence starts or ends in the middle of a payroll period, the payroll run detects and processes the absence using the proration functionality.

Creating an Absence Element and Absence Type: Worked Example

This example demonstrates how to create absence types and absence elements to manage absences that employees record.

The following table summarizes key decisions for this scenario.

Create two absence elements to store an aggregate of absences relating to sick leave and vacation leave. These elements must use the Absence classification so that they do not generate payments. Define eligibility criteria for the vacation leave element so that only full-time employees can record absences of this type. Create two absence types for sick leave and vacation leave.

Creating Absence Elements

1. On the Payroll Calculation work area, click Manage Elements to open the Manage Elements page.
2. Click Create Element.
3. Complete the fields for each absence element, as shown in this table.

   Field	Value (for the Sick Leave absence element)	Value (for the Vacation Leave absence element)
   Primary Classification	Absence	Absence
   Name	Sick Leave	Vacation Leave
   Reporting Name	Sick Leave	Vacation Leave
   Effective Date	January 1, 2010	January 1, 2010
   Should every person eligible for the element automatically receive it?	Yes	Yes
   At which employment level should this element be attached?	Assignment	Assignment
   Does this element recur each payroll period, or does it require explicit entry?	Nonrecurring	Nonrecurring
   Process the element only once in each payroll period	Yes	Yes
   Can a person have more than one entry of this element in a payroll period?	Yes	Yes

   
   
4. Click Next.
5. On the Create Element: Additional Information page, right-click Input Values, and click Create Input Value..
6. Complete the fields for the input value for both the absence elements, as shown in this table.

   Field	Value
   Name	Duration
   Display Sequence	1
   UOM	Day

   
   
7. Click Apply.
8. Right-click Element Eligibility, and then click Create Element Eligibility.
9. For the Vacation Leave absence element, complete the fields as shown in this table. Use the default values except where indicated.

   Field	Value
   Employment Category	Full Time Employment

   
   
10. For the Sick Leave element, select the Link to All Payrolls option so that all employees receive the element.
11. Click Apply.
12. Click Submit.

Creating Absence Types

1. On the Set Up Workforce Deployment work area, click Manage Absence Types to open the Manage Absence Types page.
2. Click Create.
3. Complete the fields for each absence type, as shown in this table.

   Field	Value (for the Sick Leave absence type)	Value (for the Vacation Leave absence type)
   Name	SickLeave	Vacation Leave
   Legislative Data Group	Select the legislative data group in which you created the Sick Leave absence element.	Select the legislative data group in which you created the Vacation Leave absence element.
   Valid From	January 1, 2010	January 1, 2010
   Auto Override	No	No
   Record at Person Level	Yes	Yes
   Allow Absence Overlaps	No	No
   Enable Work Schedules	Yes	Yes
   Element Name	Sick Leave	Vacation Leave
   Units	Days	Days
   Input Value	Duration	Duration
   Balance	Increasing	Increasing

   
   
4. Click Submit.

FAQs for Manage Elements

What's the difference between a recurring and nonrecurring elememt?

A recurring element has an entry that applies in every pay period until the entry is ended.

A nonrecurring element has an entry that applies in one pay period only. It is only processed once per pay period. The dates of the pay period are determined by the payroll to which the person is assigned.

What's an element's skip rule?

A skip rule is a formula that determines the circumstances in which an element should be processed. If the conditions of the formula are met, then the element is processed. Otherwise the element is skipped from processing.

When does an element get processed with a processing option of process once per period?

An element processes entries only in the first payroll run of each period for this element.

If this option is not available for your localization, you can select a skip rule to process this element once each period.

What happens if the Closed for Entry option is selected on an element?

It prevents all new element entries for the element. Selecting this option will not affect any existing element entries.

Use caution with this feature. When hiring, terminating, or updating assignments, this option will prevent element entry creation for the element, even if the element is used for automatic entries.

What happens if I override an element entry that has a runtime default set at the element's definition?

If you override it, then any subsequent changes to the default value on the element or element eligibility definition will not affect the element entry. However, you can clear your entry if you want to restore the default value.

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